The Demand for Money
Chapter 22 The Demand for Money
T
1)
Multiple Choice
The quantity theory of money is a theory of (a) how the money supply is determined. (b) how interest rates are determined. (c) how the nominal value of aggregate income is determined. (d) all of the above. Answer: C Question Status: Previous Edition
2)
Because the quantity theory of money tells us how much money is held for a given amount of aggregate income, it is also a theory of (a) interest-rate determination. (b) the demand for money. (c) exchange-rate determination. (d) none of the above. Answer: B Question Status: Previous Edition
3)
The average number of times that a dollar is spent in buying the total amount of final goods and services produced during a given time period is known as (a) gross national product. (b) the spending multiplier. (c) the money multiplier. (d) velocity. Answer: D Question Status: Previous Edition
4)
The velocity of money is (a) the average number of times that a dollar is spent in buying the total amount of final goods and services. (b) the ratio of the money stock to high-powered money. (c) the ratio of the money stock to interest rates. (d) none of the above. Answer: A Question Status: Previous Edition
Chapter 22
The Demand for Money
795
5)
If the money supply is 500 and nominal income is 3,000, the velocity of money is (a) 60. (b) 6. (c) 1/6. (d) undefined. Answer: B Question Status: Previous Edition
6)
If the money supply is 600 and nominal income is 3,000, the velocity of money is (a) 5. (b) 50. (c) 1/5. (d) undefined. Answer: A Question Status: Previous Edition
7)
If the money supply is 500 and nominal income is 4,000, the velocity of money is (a) 20. (b) 8. (c) 1/8. (d) 1/20. Answer: B Question Status: Previous Edition
8)
If the money supply is 600 and nominal income is 3,600, the velocity of money is (a) 1/60. (b) 1/6. (c) 6. (d) 60. Answer: C Question Status: Previous Edition
9)
If nominal GDP is $10
T
1)
Multiple Choice
The quantity theory of money is a theory of (a) how the money supply is determined. (b) how interest rates are determined. (c) how the nominal value of aggregate income is determined. (d) all of the above. Answer: C Question Status: Previous Edition
2)
Because the quantity theory of money tells us how much money is held for a given amount of aggregate income, it is also a theory of (a) interest-rate determination. (b) the demand for money. (c) exchange-rate determination. (d) none of the above. Answer: B Question Status: Previous Edition
3)
The average number of times that a dollar is spent in buying the total amount of final goods and services produced during a given time period is known as (a) gross national product. (b) the spending multiplier. (c) the money multiplier. (d) velocity. Answer: D Question Status: Previous Edition
4)
The velocity of money is (a) the average number of times that a dollar is spent in buying the total amount of final goods and services. (b) the ratio of the money stock to high-powered money. (c) the ratio of the money stock to interest rates. (d) none of the above. Answer: A Question Status: Previous Edition
Chapter 22
The Demand for Money
795
5)
If the money supply is 500 and nominal income is 3,000, the velocity of money is (a) 60. (b) 6. (c) 1/6. (d) undefined. Answer: B Question Status: Previous Edition
6)
If the money supply is 600 and nominal income is 3,000, the velocity of money is (a) 5. (b) 50. (c) 1/5. (d) undefined. Answer: A Question Status: Previous Edition
7)
If the money supply is 500 and nominal income is 4,000, the velocity of money is (a) 20. (b) 8. (c) 1/8. (d) 1/20. Answer: B Question Status: Previous Edition
8)
If the money supply is 600 and nominal income is 3,600, the velocity of money is (a) 1/60. (b) 1/6. (c) 6. (d) 60. Answer: C Question Status: Previous Edition
9)
If nominal GDP is $10